# Banking trends continuing through 2022 Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-03-29 Category: BANKING Category URL: https://financedigest.com/category/banking Meta Title: Banking Industry Trends 2022: Adaptation and Opportunities Meta Description: Explore the challenges and opportunities faced by banks as they navigate economic dislocation, digital transformation, and changing customer behaviours in the URL: https://financedigest.com/banking-trends-continuing-through-2022html ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/istock-640267784-1-1736815926944-compressed.jpg) _By_ **_Steve Morgan,_** _Global Banking Industry lead, Pegasystems_ _A quarter of the way into 2022 and there’s plenty of change and adaptation afoot in the banking industry. Further economic dislocation caused by the war in Ukraine, alongside [continuing supply chain pressures](https://www.financedigest.com/different-employee-engagement-outcomes-for-u-s-and-canadian-companies-amidst-continued-economic-growth-pressures.html "DIFFERENT EMPLOYEE ENGAGEMENT OUTCOMES FOR U.S. AND CANADIAN COMPANIES AMIDST CONTINUED ECONOMIC GROWTH Pressures"). This leads to a need to balance supporting customers through economic pressures as well as [banks](https://www.financedigest.com/banks-need-to-become-a-lifestyle-brand.html "Banks need to become a lifestyle brand") needing to adapt to different channel usage and close branches. These [challenges clearly represent](https://www.financedigest.com/open-data-represents-the-biggest-challenge-to-banks-in-a-generation.html "Open data represents the biggest challenge to banks in a generation") opportunities to understand new consumer habits in order to increase business performance and customer satisfaction._ **_Minor delays that customers will not accept anymore_** _Banks need to adjust to the patterns of remote, digital and [face to face interactions with customers](https://www.financedigest.com/talk-to-me-the-changing-face-of-customer-communications.html "TALK TO ME :THE CHANGING FACE OF CUSTOMER COMMUNICATIONS") and among teams. This is a [positive trend](https://www.financedigest.com/infant-positioning-aids-market-application-trends-growth-opportunities-and-worldwide-forecast-to-2027.html "Infant Positioning Aids Market Application, Trends, Growth, Opportunities and Worldwide Forecast to 2027") that nonetheless comes with tensions because of how impatience has intensified post-pandemic lockdowns. We are all super-sensitised to the slightest delay and buffering in a process given we are all remote and online so much. Slightest slip ups in design and functionality manifest themselves like micro-aggressions that customers will not accept anymore. [Banks have to scrutinise all processes](https://www.financedigest.com/reckon-introduces-link-to-bank-data-to-help-small-businesses-streamline-the-reconciliation-process.html "Reckon introduces link to bank data to help small businesses streamline the reconciliation process ") for friction, whether it’s a self-service facial ID process that clunks out when you wear glasses or a sluggish unintelligent chatbot, because the sales and service experience is the new battleground._ **_Shrinking margins will focus new_** [tech investments](https://www.financedigest.com/uks-dominos-expects-tech-investments-to-hit-2023-profit.html "UK’s Domino’s expects tech investments to hit 2023 profit") _Regardless of how interest rates will [rise in some markets](https://www.financedigest.com/in-a-rising-market-are-banking-outsourcers-pulling-their-weight.html "In a rising market, are banking outsourcers pulling their weight?"), banks will continue to have huge pressure on margins that could otherwise be used to invest in new technology. That doesn’t mean [banking technology](https://www.financedigest.com/6-technology-trends-banking-2019.html "6 Technology Trends for Banking in 2019") investment will dry up but it will be more ruthlessly focused on where the needs and returns are greatest. This could be on using technology to be more agile in the sales and marketing around quick wins around unsecured credit purchases especially as customers return to their foreign [holiday making habits](https://www.financedigest.com/100-years-of-uk-holidaying-habits.html "100 YEARS OF UK HOLIDAYING HABITS"). And where banks invest, their stakeholders will want to [see returns](https://www.financedigest.com/delta-sees-return-to-profit-as-travel-demand-hits-historic-levels.html "Delta sees return to profit as travel demand hits ‘historic’ levels"). [Witness the recent questioning of JPMorgan’s large increase](https://www.financedigest.com/bulk-ferroalloys-market-to-witness-increase-in-revenues-by-2019-2027.html "Bulk Ferroalloys Market to Witness Increase in Revenues by 2019-2027") in investment and the desire to understand the detail behind it._ **_[Access to cash](https://www.financedigest.com/supporting-a-fair-and-resilient-society-by-protecting-access-to-cash.html "Supporting a fair and resilient society by protecting access to cash ") is an old argument because customers want choice not channels_** _There’s not been a month without branch closure announcements in 2022. [Banks will be doing more pruning of branch](https://www.financedigest.com/are-white-label-branches-the-future-for-retail-banking.html "Are white-label branches the future for retail banking?") networks as more consumers walk away from using cash in their transactions. The old model of how physical cash was delivered and collected within our communities is redundant. Yet, the branch has a place in [banking because of how it facilitates face to face meetings](https://www.financedigest.com/banking-stability-worries-go-behind-closed-doors-at-imf-world-bank-meetings.html "Banking stability worries go behind closed doors at IMF-World Bank meetings") that can secure valuable business like mortgages. So, expect to see more examples of some branches re-modelled into providing mortgage or [wealth management](https://www.financedigest.com/analysis-credit-suisse-collapse-threatens-switzerlands-wealth-management-crown.html "Analysis-Credit Suisse collapse threatens Switzerland’s wealth management crown") services._ _There’s also a [lesson that banks must learn](https://www.financedigest.com/learning-the-lessons-of-the-bangladesh-bank-heist.html "LEARNING THE LESSONS OF THE BANGLADESH BANK HEIST") from the underlying reason as to why branch closures are resisted. It’s less the ‘community’ argument, and more the need to go and the choice to go to a branch. [Data clearly suggests](https://www.financedigest.com/big-data-suggests-leicesters-football-success-could-usher-in-economic-boom.html "Big data suggests Leicester’s football success could usher in economic boom") that one in five customers who go into branch started in another channel. Many are being forced to go into a branch that in some cases may not [exist much longer](https://www.financedigest.com/chinese-findings-on-mars-suggest-water-existed-for-longer-on-planets-surface.html "Chinese findings on Mars suggest water existed for longer on planet’s surface"). What this [tells me is how the omnichannel term is so wrong for banking](https://www.financedigest.com/be-simple-in-bank-capital-bank-of-england-tells-global-regulators.html "Be simple in bank capital, Bank of England tells global regulators"). Customers want choice across channels. When they go into the branch it should be their choice and not something forced on them because of a broken [digital process](https://www.financedigest.com/automating-business-processes-is-essential-to-digital-transformation.html "Automating business processes is essential to digital transformation"). Clearly there’s a conflict here of channel [cost to be managed](https://www.financedigest.com/managing-the-cost-of-digital-transformation-with-saas-optimisation.html "Managing the Cost of Digital Transformation with SaaS Optimisation"), but that process no longer available in a branch needs to work seamlessly in another channel._ **_Lend smarter automation a caring heart_** _The pandemic revealed [banks were good at automating](https://www.financedigest.com/how-banks-can-avoid-regulatory-reporting-mistakes-with-a-good-dose-of-automation.html "HOW BANKS CAN AVOID REGULATORY REPORTING MISTAKES WITH A GOOD DOSE OF AUTOMATION") processes. Yet, the great focus will be on how automation can enable personalised interactions that are very human. This is not just about empathetic AI but how AI and [intelligent automation can spot markers that allow the bank](https://www.financedigest.com/artificial-intelligence-in-banking-robo-advisors-and-beyond.html "Artificial Intelligence in Banking – Robo Advisors and beyond") to make a meaningful interaction with a customer. For example, a customer is coming up for a date when they could refinance their mortgage, the system is automated to get the colleague who sold the [mortgage originally to call up the customer with a new best offer](https://www.financedigest.com/britain-urges-banks-to-offer-mortgage-flexibility-in-cost-of-living-crisis.html "Britain urges banks to offer mortgage flexibility in cost-of-living crisis") and not just send out an automated email._ _Technology is key to this, because the volume of [data analytics is so overwhelming that there needs to be an investment](https://www.financedigest.com/investing-in-the-future-with-alternative-web-data.html "Investing in the future with alternative web data") in intelligent automation. So to be successful in 2022, banks can do more to use AI to marshal better human, personalised interactions._ **_There’s no Planet B(ank)…_** _Banks should be positively [embracing](https://www.financedigest.com/rethinking-retail-banking-embracing-a-customer-centricvalue-proposition.html "Rethinking retail banking: Embracing a customer-centricvalue proposition") net-zero banking. Both reporting standards and [expectations are increasing](https://www.financedigest.com/polyimide-fibers-market-is-expected-to-increase-at-a-healthy-cagr-of-around-5-over-the-forecast-period-of-2021-2031.html "Polyimide Fibers Market is expected to increase at a healthy CAGR of around 5% over the forecast period of 2021-2031"), and I think there’s a genuine desire on the bank side to do more._ _Following COP 26 there is natural pressure on businesses to make concrete steps [towards net zero targets and banks](https://www.financedigest.com/the-journey-towards-a-digital-bank-five-major-stages-to-successful-banking-digitalisation.html "THE JOURNEY TOWARDS A DIGITAL BANK – FIVE MAJOR STAGES TO SUCCESSFUL BANKING DIGITALISATION") can play a pivotal role here. There are obvious areas around bank supply chains and their lending, but there will be other areas where a bank has an indirect influence on spending habits such as providing information on [carbon footprint](https://www.financedigest.com/ecb-can-cut-carbon-footprint-by-shedding-bonds-of-biggest-polluters.html "ECB can cut carbon footprint by shedding bonds of biggest polluters") spend, raising awareness of leading ESG partners to do business with and so much more. There is plenty of space to be filled and progress to be made in this space.”_ --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---